Questions/Answers

Indonesia is endowed with huge tropical forests of more than 120 million hectares, or more than 60 % of the country’s land areas. During the period of 70’s to 90’s, forestry sector become the second most important sector to contribute to foreign revenue after the oil and gas industry. Rampant illegal logging brought very severe impact of forest devastation and the downward of Indonesia forest industry to the lowest point. Greenpeace (2000) claimed that 80% of exported timber from Indonesia was from illegal sources. A media also reported that Indonesia supplied more than 200 million cubic meters of unreported or illegally-sourced timber between 1991 and 2014. This had a devastating effect both environmentally and economically. The country lost 2.3 million hectares of forest as well as USD 9 billion in uncollected non-tax revenue between 2003 and 2014. To cope with this situation, since 2001 Indonesia developed a national initiative on timber legality verification, the SVLK (Sistem Verifikasi Legalitas Kayu) to combat illegal logging and the trade in illegal timber, and to improve governance and the management of Indonesia’s forests. This initiative was also established to meet growing demands from international markets on legally-sourced timber exports.

Development and implementation of the SVLK initiative has been accomplished through a very genuine and innovative multi-stakeholder process to involve all elements of government, business entities, NGOs, and communities and others. This initiative also reflects the political will and the willingness of stakeholders to improve governance in the forest-related industry, and the synergy between different sectors and institutions to combat illegal logging and associated trade, and promoting trade of legal timber. Development of the Initiative also enhances performance and service of respective ministries on issuance of legality documents through cross-sector online platform that reducing cost for exporting timber products.

Implementation of the SVLK Initiative encourages more responsible production and consumption of legal and sustainable timber both in producing and importing countries. This is relevant to support SDG 12 (target 12.6 indicator 12.6.1 and target 12.7 indicator 12.7.1) to encourage more responsible production and consumption of legal and sustainable timber products. With regard to SDG 15, this initiative supports efforts to combat illegal logging and associated trade and reduce forest degradation, in particular target 15.2 indicator 15.2.1 and target 15.3 indicator 15.3.1. This initiative also supports achievement SDG 17 target 17.11 indicator 17.11 to promote trade from developing countries.

Implementation of the SVLK is supported with an online platform (website www.silk.menlhk.go.id) for issuing legality assurance document. This allows exporters, including those of MSMEs to apply for certification process and licenses, and have equal opportunity to access global timber markets. This platform is also accessible from everywhere to allow this public service to provide equal opportunities to all players, including those in some remote areas. This online system also provides a prompt service and prevent from corruption. The SVLK initiative consists of a verification system for assessment and verification of all players, including concession holders, timber businesses and traders dealing in the production, processing, transportation, distribution, transfer and trade of timber and wood products. When satisfied, a certificate will be granted and issued. Therefore, this initiative encourages upon compliance and obedience to the SVLK rules and regulations. Verification by accredited independent third party also guarantees the credibility of the system. Likewise, participation of consortium of NGOs as independent monitoring networks also guarantees transparency of the system.

The SVLK initiative involves multi-stakeholders from different sectors. Independent third-party bodies conduct certification process, while CSOs conduct regular monitoring. The SVLK also applies appeal and dispute-settlement mechanisms to ensure an equitable, fair and transparent approach in dealings with relevant parties. The scheme applies a tracking system to ensure sourcing of raw material from sustainably-managed forests and an online platform for issuing legality assurance licenses for timber and wood exports. The SVLK has officially been recognised by the EU under its FLEGT framework and by Australia under its Illegal Logging Prohibition Act. This achievement has been the first in the world.

As follow up to Bali Declaration 2001 the Government encouraged stakeholders to develop action plan to combat illegal logging through law enforcement and improvement on forest governance. The Initiative is a soft approach to support law enforcement measures by screening the entry of illegal timber and wood products to the supply chain of production and distribution. Development of the Initiative refers to ISO guidelines on conformity assessment upon a set of agreed standards to elaborate sustainability on aspects of economy, social and environmental. Indonesia genuinely introduced a multi-stakeholders process in the development and implementation of the scheme.

The SVLK has become a reference for the potential application of similar timber-assurance systems in a number of countries, including China, Ghana, Malaysia, Vietnam and others. Some of these countries are also in negotiations with the EU to securing the same FLEGT VPA that Indonesia possesses, which would enable them to export certified timber to European markets. In Indonesia, the approach and methods used by the SVLK scheme have been under replication to palm oil. This means that the initiative could be used in any sector where the origin of products, good governance and sustainability are of paramount importance.

The Government of Indonesia has allocated budgets and assigned human resources and provides tools and machines for development and implementation of the SVLK Initiative. This includes development of rule and regulations, institutional structure, the standards, the mechanism, the rules and procedure, and other requirements and guidance as the basis for implementation of the scheme. Budget allocation also supports accomplishment of dissemination, capacity buildings, public consultations, development of on-line platform for issuing licenses, and assessment for certification of business entities, including for micro, small and medium enterprises. Supports have also been provided by Donors, including from the UK-DFID.

Development of the SVLK elaborates sustainability aspects on economy or production, social and ecology or environment. Certification on SVLK verifies conformity of a forest related player to a set of agreed standards. Compliance upon the standard and granting of an SVLK certificate reflects that the auditee meets all requirements on sustainable forest management. Since 2013, Indonesia has certified more than 23 miilion hectares state forests have been certified under the SVLK scheme. Exports of timber and timber products from Indonesia show an increasing trend. By the end of November 2018 total exports of SVLK-certified timber products reached a value of more than US$ 11.2 billion, or increased by more than 84 % compared to the total exports value of nearly US$ 6.06 billion in 2013 when the implementation of SVLK Scheme was initiated. Exports value by the end of November 2018 has also exceeded total value for the year 2017 with value of 10.94 billion. This reflects that Indonesia could capture back the market trust and confidence.

Yes

Study on impact monitoring upon implementation of the SVLK has been carried at a preliminary stage. Indicators were suggested for five areas of impact (impact on combating illegal logging; impact on conditions of the forests, impact to economic development; and impact on livelihood of communities). For each impact area, baseline data were collected for the year of 2009 (when Indonesia started implementation of the Initiative), 2013 (when mandatory implementation of SVLK entry into force), and 2016 (when Indonesia started as FLEGT Licensing country). The data was further analyzed to monitor the impact.

There has been some indicator for monitoring impact of illegal logging, among others number of cases, and total area and estimated volume of timber due to illegal logging. For monitoring impact on forest condition, there are some indicators among others data of conservation and protected areas, and data of forest land cover. For economic development, there have been indicators, among others local revenue from forestry sector, export value of forestry industry products. For sustainability and livelihoods, there have been indicator of fulfillment of social responsibility to the public, and increasing the assets and income.

The study on impact monitoring has been presented at the http://silk.menlhk.go.id/app/Upload/informasisvlk/20181130/3c653c2aa7d4bb4456db7cf28c6781b1.pdf. Preliminary study suggested that implementation of the SVLK has positive impacts on trade and efforts to combat illegal logging. By the end of 2017 exports value of SVLK-certified timber products increased by more than 80 % compared to exports value in 2013 when the SVLK was implemented mandatorily. The institutional structure of the initiative has also been effective to improve forest governance. More in-depth study and more baseline data for impact on livelihood of communities and for impact on forest cover are needed.

The development of the SVLK Initiative involved a diverse range of stakeholders, including representatives from respective ministries and other government institutions, forestry-related business associations; forest concession holders, wide range of Civil Society Organizations (CSOs), citizens including members of customary and indigenous communities; academics, and donors, including the United Kingdom’s Multi Stakeholder Forestry Programme (MFP). The SVLK innovation has been utilised by a number of different individuals and groups, all of whom have an interest in forest management and/or the production and trade of timber and wood products in Indonesia. Key stakeholders include relevant ministry officials; forest management units; certification bodies, and a broad network of CSOs. Beneficiaries include businesses both large and small within Indonesia’s timber industry, and the countries importing timber and wood products from Indonesia.

Long-term commitment is required from stakeholders as it may take time to accommodate views, concerns and aspirations. Cross-sectoral stakeholders are needed to ensure that voices are heard and ideas are considered. Laws and regulations pertaining to the scheme should be regularly reviewed to incorporate the latest developments. The implementation of such system can be a complex and expensive process; therefore financial and capacity-building support should be sought and made available for any party that lacks of the required knowledge or financial means to fully participate. Greater international cooperation is needed to increase awareness and promote replication of similar schemes.